Syrian pound strengthens as central bank intervenes

Syria's Central Bank has managed to bring the Syrian pound back down into a manageable trading range. It had plunged to an exchange rate over 100 pounds to a dollar. It is now below 100 to a dollar. "How did it do this? Reports are that the central bank sold only 2 million dollars. Yes, only 2 million dollars in order to calm the market. One friend reported paying 113 pounds for a dollar in Aleppo on Wednesday 7 March. On Thursday morning, the pound had risen to a range between 89 and 91 per pound. Six hours later it hit 103. The rate was bouncing all over the place between 85 to 113 per dollar; there was no real price."

Prof. Joshua Landis in his blog Syria Comment notes that if the Central Bank can hold the price of the pound below 90 per dollar, it will be doing very well. "That is where it really belonged before the revolution. Syria had been pursuing a suicidal strong-pound policy for years. The artificially high rate of 47 pounds to a dollar ignored imbalances in the economy. It undercut Syrian exports and inflated the cost of doing business in Syria, which has too many impediments and too few attractions for foreign investment."

"The Syrian uprising is being driven largely by political factors, but one should not ignore the numbers. Ehasani, who has been writing for Syria Comment for over five years, has consistently warned us that Syria's economic numbers do not add up. Eventually, reality would mug Syrians," concludes Landis.